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Holding Strong – Keep a Keen Eye

Gold and silver are holding firm in spite of its month long consolidation. A further decline in this D decline is still possible, and for now the key is the 15-week moving average, see gold chart below. Keep an eye on $2310 for gold and $28.50 for silver. Both are holding well above this moving average, and they'll remain firm in a high area by staying above it. On the downside, a stronger D decline would be underway below these levels. Gold shares are similar. The HUI index is holding above its 15-week MA at 260.

If gold and silver rise clearly above their May highs, this bull market could turn explosive. It would mean the D decline was a minor correction which in itself is unusually strong. That is, gold hasn't wanted to decline in a normally weak time, both seasonally and being temporarily overextended. We'll keep our eye on these levels to see the next direction. Don't be disappointed to see more weakness. That is what would be normal right now. Keep your positions

The stock market continues in the AI bubble excitement. And this enthusiasm could last a while longer. The PTI continues to hold firmly at the highs, well above its 89-day average, see chart below. This says it'll remain in stellar strength by staying above the average.

One cautious sign is the volatility index. The VIX tends to move opposite the stock market. It declines when the market rises. As you can see on the next chart, it's at a very low level, the most since 2019, which was just prior to the big fall in the market. Note at each S&P 500 peak since then has reflected a low VIX. And today is the third one. It's warning us to be cautious. We continue to watch from the sidelines. That is, except the precious metals, resource and energy sectors.

Resources: Copper is also holding up above its 15-week moving average at $4.42. This shows firmness. And our shares are bouncing up from their recent lows following copper (FCX, IVPAF, GLNCY, BHP, RIO). Our two steel companies remain weak, but it looks like the downside is limited.

Our uranium shares are consolidating and poised for an upmove. Keep them.

Crude oil is taking off above $80. It closed at a seven-week high today, and it's on its way to the $87 level, and possibly higher. Demand is growing.

Treasuries reached a 12 week high this week, and they're selling well! Long dated interest rates have been sluggish at best, holding near the highs. Note on the chart below, the 10-year yield is losing steam as it gets closer to its Dec 2023 lows. If the 10 year yield stays below its growing downtrend, and closes below 4.15% (65-week MA), and especially below last December's lows at 3.80%, a steeper decline would be underway. Note the 65-week moving average has been a strong support during all of the rise of the last several years. It's a key level to keep an eye on. The U.S. dollar remains strong above 104.50 and it'll be reaching a new high for the move if it surpasses 106.50.

Editor’s Note: The above was a Weekly Update from The Aden Forecast, co-edited by Mary Anne and Pamela Aden. The Aden Forecast, 1 year, $250, is considered one of the most influential investment publications in the world today. The Aden Forecast, now in its 40th year, specializes in the U.S. stock market, mutual funds, U.S. interest rates and bonds, the international stock and bond markets, the foreign exchange and precious metals markets. For more information visit www.adenforecast.com.

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